Union Leaders and Contractors Oppose Government-mandated Project Labor Agreements Too

0 March 1, 2021  Featured, Federal Construction, Open Competition Works, State & Local Construction

The debate surrounding controversial government-mandated project labor agreements is often framed by the media, elected officials and policy wonks as a dispute pitting construction unions against nonunion contractors in a battle about whether the government should be enacting PLA preference and mandate policies that ultimately steer taxpayer-funded construction contracts to unionized contractors and create jobs almost exclusively for unionized labor.

However, the truth is a bit more complicated, and the framing of this story isn’t always accurate.

Stakeholders and associations representing contractors with collective bargaining agreements, including Associated Builders and Contractors and the Associated General Contractors, argue that PLA mandates interfere with existing collective bargaining agreements negotiated between contractors and various construction trade unions.

Talking points by AGC, which has chapters that negotiate CBAs directly with various construction unions on behalf of some unionized member contractors, state that government-mandated PLAs, “reintroduce inefficient work rules that have been abandoned over the course of collective bargaining.” An AGC report on government-mandated PLAs expands on the argument that PLA mandates harm unionized contractors and make them less competitive:

Likewise, a GMPLA can increase the cost of the project for the union contractor. Rather than bidding and performing work on the project based on the costs related to the terms and conditions the contractor has agreed upon with its signatory unions, upon substantial investments of time and resources over years of negotiations, the contractor under a GMPLA is subjected to the costs of new terms and conditions often with different and more numerous unions. This can create jurisdictional disputes that would not otherwise exist. Because contractors are not usually given an opportunity to participate in the negotiations for a GMPLA, there is no opportunity to harmonize the terms of different contracts to achieve a cost-efficient outcome. Moreover, even when included in the negotiations, the contractor has little bargaining leverage once the public agency has decided that a GPMLA will be used. Knowing that a deal must be struck as a condition of the construction contract, the unions are in a position to demand and hold out for costly wages (above applicable prevailing wage standards), hours and other terms and conditions.

Unionized contractors as well as construction industry associations representing unionized contractors have made similar arguments successfully in the courts that government-mandated PLAs prevent them from bidding on public works projects because the PLAs violate terms of their existing collective bargaining agreements with unions not favored in the PLA.

The U.S. District Court for the Eastern District of Pennsylvania sided with plaintiff contractors signatory to the United Steelworkers union in a March 27, 2020, ruling in Road-Con, Inc., et al. v. The City of Philadelphia. The ruling agreed that the plaintiff contractors could not work on taxpayer-funded construction projects under the City of Philadelphia’s controversial pro-PLA policy stemming from a 2011 Executive Order because the PLA did not include the Steelworkers Union as a designated union, and signing an agreement with other unions in a PLA violated the plaintiff’s existing collective bargaining agreement with the Steelworkers Union, thereby making them unable to bid on public works projects subject to government-mandated PLAs.

An August 2019 Philadelphia Inquirer article on a lawsuit contends that a PLA mandated by the Delaware River Joint Toll Bridge Commission on the I-295 Scudder Falls Bridge (formerly I-95) over the Delaware River between Bucks County, Penn. and Mercer County, N.J., needlessly increased costs by $70 million or 20% above the project’s estimate. The plaintiff, George Harms Construction, a local New Jersey firm, said the PLA made it impossible to use his steelworkers union members and other workers who aren’t part of the Philadelphia trade unions favored in the project’s PLA. Harms said it planned to bid $325 million, within the range that the commission’s engineers originally estimated, if it could use its steelworkers labor force.  Though dozens of contractors sought bidding information for the job, only one company — Trumbull Corp. of Pittsburgh, an affiliate of P.J. Dick and Lindy Paving, frequent bidders on state projects saddled with PLA requirements — finally offered to build the bridge after the commission insisted on the PLA. Trumbull’s bid — $396 million — was more than 20% above the high end of the commission’s projected price range.

In 2019, the Long Island and New York Mechanical Contractors Association launched a website, StopPaytoPLA.com, to fight back against government-mandated PLAs that were harming unionized contractors and workers in the New York market:

Why Stop Pay To PLA?

We’re an organization of union contractors employing union workers. We believe in open competition and fair bidding. We are against government-mandated PLAs. We especially want you to know where your hard-earned tax dollars are being wasted on construction in your area.

The group even produced this slick #NoPLAs video:

In Washington state, the carpenters union filed a RICO case against the AFL-CIO’s Building and Construction Trades Department over BCTD-backed PLA and apprenticeship mandates that cut out carpenters union workers and signatory contractors in 2012.

In 2013, New Jersey labor union leaders and unionized contractors spoke in opposition to a New Jersey bill expanding government-mandated PLAs on taxpayer funded construction projects because the bill was, ” particularly injurious when it comes to a contractor’s bargaining power during labor negotiations which becomes severely limited when a PLA is in place.  Very often, Project Labor Agreements give rise to union jurisdictional battles, bringing new trades onto the jobsite that would otherwise not be involved in infrastructure construction projects.”

In 2010, the Building Industry Electrical Contractors Association and United Electrical Contractors Association, filed a complaint against the City of New York’s widespread use of government-mandated PLAs on schools and other public works because the some of their union-signatory member companies were effectively excluded from the competitive bidding process for NYC contracts subject to a government-mandated PLA under their existing contracts and relationships with other unions that are not favored or part of the NYC PLAs.

New Jersey’s Bayonne Local Redevelopment Authority was sued by the International Steelworkers Union to get on the list of unions eligible to perform work on a PLA covering a Military Ocean Terminal site in 2009.

Even union officials oppose government-mandated PLAs.

In an October 13, 2020, op-ed in the NY Post, Kevin Barry, director of the construction division of the United Service Workers Union based in Queens, said this about government-mandated PLA schemes following the indictment of James Cahill, president of the New York State Building and Construction Trades Council, and 11 others on corruption and bribery charges:

The American labor movement was founded to facilitate collective bargaining to improve workers’ economic status and working conditions. But the sheer power wielded by some union bigs too often frustrates that noble aim.

One of the ways that traditional building-trades-union bosses grab so much authority is through state- and city-granted Project Labor Agreements.

When a PLA is in place, it grants a union leader the power to call all the shots and determine which locals get total and complete control of multibillion-dollar public and private construction projects. Those in charge decide what it’s going to cost in labor to get the job done. They become the ultimate power brokers, controlling numerous jobs and commanding the loyalty of countless beneficiaries down the line.

Cut out of these schemes are smaller construction unions and their members, who want to play by the rules and have their work priced honestly based on the output of our labor. Unions like mine have long been forced to compete on an uneven playing field, and if these allegations are true, now we know how and why.

This summer, Mayor Bill de Blasio announced a new exclusive municipal-construction labor agreement with the New York Buildings Construction Trade Council. It grants certain executives and unions complete monopolistic control over any projects that might receive tax abatements, public financing or other subsidies equaling 30 percent or more of the cost of construction.

Cahill has won similar concessions from the state of New York, where exclusive PLAs are the norm, used for the $4 billion rebuilding of the Tappan Zee Bridge (now the Mario Cuomo Bridge), the $1 billion Tesla Giga Factory and the Buffalo Billion project to revive the upstate economy.

Yet even while under the dark cloud of a federal indictment, the Building Trades still hold sway over this way of doing business in New York.

This power is not granted to this group through the normal legislative process nor debated on the floor of the Senate or Assembly or in our public square.

Instead, in a convoluted section of the $177 billion state budget, there is a requirement that on certain projects, there either be a prevailing wage or a PLA — to the exclusion of many other unions and others not in the Building Trades. It’s a sweet deal for the monopoly.

We have long been taught that monopolies are harmful and drive up the cost of business while potentially sidelining the best and brightest workers. It’s time we acknowledge that such excessive powers granted by the government are abhorrent, leading directly to corruption.

In a democracy, is it really government’s role to pick winners and losers among the labor force, as if by royal decree? President Theodore Roosevelt, the New York-bred trustbuster, would be turning over in his grave, if he witnessed these machinations. PLAs aren’t in the best interest of taxpayers — and it’s time to pull the plug on them.

We agree.

These examples demonstrate how falling into the trap of framing the PLA debate as a story pitting construction unions vs. nonunion contractors and workers is a mistake and nuance matters.

The truth is America needs to foster competition from the entire construction industry so the best contractors and the best workers, regardless of labor affiliation, compete to deliver to taxpayer the best possible construction product at the best possible price.

This post was written by and tagged Tags:, , , , , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *